India, the world's top rice exporter, may continue to restrict rice export sales next year. The decision could push rice prices close to their highest levels since the 2008 food crisis.
Over the past decade, India accounted for nearly 40% of global rice exports. But under Indian Prime Minister Narendra Modi, the country has been tightening exports to control rising domestic prices and protect Indian consumers.
Sonal Varma, chief economist for India and Asia at Nomura Holdings Inc., pointed out that export restrictions will continue as long as domestic rice prices face upward pressure. Even after the upcoming election, these measures are likely to be extended if domestic rice prices do not stabilize.
To curb exports, India has adopted measures such as export tariffs, minimum prices and restrictions on certain rice varieties. This caused international rice prices to surge to a 15-year high in August, leaving importing countries hesitant. According to statistics from the Food and Agriculture Organization of the United Nations, rice prices in October were still 24% higher than the same period last year.
Krishna Rao, president of the Indian Rice Exporters Association, said the government is likely to maintain export restrictions ahead of the upcoming polls to ensure adequate domestic supplies and control rising prices.
El Niño usually adversely affects crops in Asia, and its arrival this year could further tighten global rice markets, adding to concerns. Thailand, the second largest rice exporter, is expected to see a 6% drop in rice production in 2023/24 due to dry weather.
